Are the unemployed lazy? Or are there just not enough jobs?

Some basic economics can provide a straightforward answer to what ails the labor market. As with any market, there are two possible culprits, demand and supply (and, yes, lots of other possible complications, but we’ll keep it simple for now). If the unemployed are lazy, then there’s a supply shortage, as there simply aren’t enough people willing to work at the wages offered. If that’s the case, then we should see wages go up. On the other hand, if there simply isn’t enough demand for labor then we should see wages going down as multiple people compete for a limited supply of jobs.

Now we can turn to the data. This is weekly real (adjusted for inflation) wages since 1979. (Data from the Bureau of Labor Statistics)

weekly real wages

So, wages are down since peaking in 2009. This doesn’t look like a market where employers are competing against government benefits in order to get workers. We can also look at records of how many jobs are available compared to the total number of people looking for work. New York’s department of labor has records for the number of job seekers per job for each month dating back to 2001. (The data is for the entire United States, not just NY).

job seekers per opening

The number of job seekers per opening is down from it’s peak, although still nowhere near the tight labor market of January 2001 when there was nearly a one to one match between the number of job openings and the number of people seeking jobs. Some really simple math confirms that 3>1, so there clearly aren’t jobs available for everyone who wants them.

Wages have lagged behind productivity for years in the United States, and yet somehow the dominant narrative remains that workers are lazy, not that wages are low and the safety net provides an even lower level of subsistence to those who are unable to find employment. The Economic Policy Institute put together a rather shocking chart comparing productivity to average wages, median wages, and median male and female wages. I’d known that wages lagged productivity, but was still stunned to see that the median male wage has not risen since 1973. Our economy is leaving the average male worker behind; and instead of fixing the problem, we’re blaming them for it.

EPI graph of productivity and sev wages


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